Price and service competition with maintenance service bundling

Wang, Yi and Sun, Linyan and Qu, Rong and Li, Gang (2015) Price and service competition with maintenance service bundling. Journal of Systems Science and Systems Engineering, 24 (2). pp. 168-189. ISSN 1861-9576

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In many equipment manufacturing industries, firms compete with each other not only on products price, but also on maintenance service. More and more traditional products oriented firms are offering their customers products bundled with maintenance service (P&S bundles). In this study, we examine firms’ incentive to offer customers products bundling with long-term maintenance or repair support service in a duopoly competitive environment. When providing P&S bundles, a firm need to determine the service level (in terms of average response time guarantee for the service in this paper) to offer and needs to build a service facility to handle the maintenance service requirements. Based on the analysis of three sub-game models, we characterize the market conditions in which only one firm, both firms or neither firm will offer P&S bundles. Finally, we analyze the affects of several market factors on firms’ strategy choices.

Item Type: Article
Additional Information: The final publication is available at Springer via
Keywords: Service Competition, Queues, Products and service bundles, Product differentiation
Schools/Departments: University of Nottingham UK Campus > Faculty of Science > School of Computer Science
Identification Number:
Depositing User: Qu, Rong
Date Deposited: 14 Dec 2015 14:04
Last Modified: 14 Sep 2016 02:16

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